32. What is the amount of working capital for Symphony? A. $98.B. $143.C. $128.D. $113. AACSB: Analytic AICPA FN: Risk Analysis Blooms: Understand Difficulty: 3 Hard Learning Objective: 03-08 Identify and calculate the common liquidity and financing ratios used to assess risk. Spiceland - Chapter 03 #33 Topic: Financial Analysis: Liquidity and Financing Ratios Used to Assess Risk
33. For each of the following situations, state whether you agree or disagree with the financial reporting practice employed, and briefly explain the reason for your answer.1. Cantor Corporation's accountant increased the book value of a patent from its original cost of $1 million to its recently appraised value of $6 million.2. Stanton Corporation paid for the personal travel of its chief financial officer and charged travel expense.3. At the end of its 2013 fiscal year, Dower, Inc., received an order from a customer for $60,000. The merchandise will ship early in 2014. Because the sale was made to a long-time customer and the invoice was paid in 2013, the controller recorded the sale in 2013.4. In the middle of its 2013 fiscal year, Sanguinetti, Inc., paid $12,000 to its insurance company for one-year comprehensive insurance coverage. Sanguinetti recorded the entire expenditure as an expense in 2013.5. The Churchill Pharmaceutical Company included a note in its financial statements that described a pending lawsuit against the company.6. The Daily Corporation, a company whose securities are publicly traded, prepares monthly, quarterly, and annual financial statements for internal use but disseminates to external users only the annual financial statements. 1. Disagree. This is a violation of the historical cost (original transaction value) principle.2. Disagree. This is a violation of the economic entity assumption.3. Disagree. This is a violation of the realization (revenue recognition) principle.4. Disagree. This is a violation of the matching principle.5. Agree. The company is conforming to the full disclosure principle.6. Disagree. This is a violation of the periodicity assumption. AACSB: Analytic AICPA FN: Decision Making Blooms: Apply Difficulty: 2 Medium Learning Objective: 01-08 Describe the four basic assumptions underlying GAAP. Spiceland - Chapter 01 #126 Topic: Underlying Assumptions
34. Flint Hills, Inc. has prepared a year-end 2013 trial balance. Certain accounts in the trial balance do not reflect all activities that have occurred.Required:Prepare adjusting journal entries, as needed, for the following items.1. The Supplies account shows a balance of $540, but a count of supplies reveals only $210 on hand.2. Flint Hills initially records the payments of all insurance premiums as expenses. The trial balance shows a balance of $420 in Insurance expense. A review of insurance policies reveals that $125 of insurance is unexpired.3. Flint Hills employees work Monday through Friday, and salaries of $2,400 per week are paid each Friday. Flint Hills' year-end falls on Tuesday.4. On December 31, 2013, Flint Hills received a utility bill for December electricity usage of $190 that will be paid in early January.
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